### UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY WASHINGTON, D.C.

Issued by the Department of Transportation

on the 3 rd day of February, 20 1 2

Essential Air Service at

SALINA, KANSAS DOCKET DOT

- OST

- 2002

- 11376

under 49 U.S.C. 41731 et seq.



### ORDER RE

- SELECTING CARRIER

Summary By th is O rder, the Department is re

- selecting SeaPort Airlines Inc. (SeaPort) to provide

Essential Air S ervice (EAS) at Salina, Kansas

, using 9

- seat Pilatu s PC

- 12 aircraft for the

four

- year period beginning April 1, 2012, through March 31

, 2016

, for an annual subsidy of $ 1,490,479

. 1

Background By Order 2010

- 3

- 17

, March 12, 2010 , the Department selected SeaPort to provide EAS at

Salina with 18 weekly nonstop round trips to Kansas City International Airport (Kansas City) for the period from April 19, 2010, through March 31

, 2012, for a first

- year annual subsidy of $1, 489,435

, and a se cond

- year annual subsidy of $1,4 93,381.

As the end of the contract was approac hing, we issu ed Order 2011

- 11

- 1

, November 1

, 2011, requesting proposals from carriers interested in providing EAS at the community

, for a new term beginning April 1, 2012 . In response to that Order , we received a proposal from only the incumbent, SeaPort.

1 Such subsidy is calculated and distributed on a fiscal year basis, subject to the availability of appropriated

funds. Order: 2012

- 2

- 4

Served: February 3, 2012- 2

-

The carrier’s complete proposal and community comments may be accessed online at http://www.regulations.gov/ by entering Docket number DOT

- OST

- 2002

- 11376 in the

search block

.

Proposal of SeaPort SeaPort proposed one option for a four

- year term that would provide three weekday and three weekend nonstop round trips (18 a week) to Kansas City using 9

- seat Pilatus PC

- 12 aircraft for an annual subsidy of $ 1, 490,479

.

Community Comments

On November 30 , 2011, we requested community comments regard ing this carrier

selection case. In response, we received letters from Samantha Angell , Mayor of Salina

, and Timothy F. Rogers, Executive Director at Salina Airport Authority

. Both letters expressed sup port for SeaPort’s proposal and are optimistic that the continuation of SeaPort’s dependable service will restore community confidence in l ocal passenger air service. In addition, both Mayor Angell and Mr. Rogers were confident that passenger enplanements would continue to increase, thus bringing Salina’s per passenger subsidy below $200.

Decision The decision is straightforward and clearly points to the re

- selection of SeaPort for a new

, two

- year term. The community fully supports SeaPort ’s proposal and has communicated to the Department on more than one occasion their satisfacti on with the airline’s service. We note that SeaPort’s subsidy request is slightly less than the current subsidy. W hile we are concerned about Salina’s per passenger subsidy being over the $200 cap, we are encouraged by the fact that passenger enplanement s have been increasing since SeaPort began service at Salina in 2009 (4,995 total passengers for fiscal year 2011 vs. 4,617 for fiscal year 2010) . T he community and SeaPort have demonstrated that they are committed

to working together to increase enplanem ents , and the four

- year term should allow for longer

- term projects to increase ridership while providing the Department with some budget certainty. We will continue to monitor enplanements during the course of SeaPort’s contract and will take appropriate action, including possible termination of eligibility for subsidy under the EAS program.

W e shall make this selection of SeaPort at Salina contingent upon the Department’s receiving properly executed certifications from the carrier that it is in compliance with the Department’s regulations regarding drug

- free workplaces and nondiscrimination, as well as the regulations concerning lobbying activities.- 3

-

Carrier Fitness

49 U.S.C. 41737(b) and 41738 require that we find an air carrier fit, willin g, and able to provide reliable service before we may subsidize it to provide Essential Air Service

. SeaPort is subj ect to the Department’s continuing fitness requirements, and no information

has come to our attention tha t would cause us to questio n the c arrier's fitness at this time. We have contacted the Federal Aviation Administration, and it has raised no concerns that would negatively affect our fitness finding s . We therefore conclude that the carrier is

reliable and remain s fit to conduct the opera tions proposed here.

This Order is issued under authority delegated in 49 CFR 1.56a(f).

ACCORDINGLY,

1. We select SeaPort Airlines, Inc. to provide Essential Air S ervice at Salina, Kansas

, an d

establish an annual subsidy rate of $ 1,490,479

, as described in Appendix C;

2. We direct SeaPort Airlines, Inc. to retain all books, records, and other source and summary documentation to support claims for payment, and to preserve and maintain such documentation in a manner that readily permits its audit and examination by representatives of the Department. Such d ocumentation shall be retained for seven years

from the service date of this Order or until the Department indicates that the records may be destroyed, whichever comes first. Copies of flight logs for aircraft sold or disposed of

must be retained. The ca rrier may forfeit its compensation for any claim that is not supported under the terms of this Order ;

3 . We f i nd that SeaPort Airlines, Inc. continue s to be fit, willing and able to operate as a

commuter carrier

, and capable of providing reliable Essenti al Air S ervice at Salina ;- 4

-

4. This docket will remain open pending further Department action ; and

5 . We will serve copies of this Order on the Mayor of Salina, the Executive Director of the Salina Airport Authority, and SeaPort Airlines, Inc.

B y:

SUSAN L. KURLAND Assistant Secretary for

Aviation and International Affairs

(SEAL)

An electronic version of this document is ava ilable at http://www.regulations.govAppendix A



## AREA MAPAppendix BAppendix C

SeaPort Airlines, Inc.

Essential Air Service to be Provided at Salina, Kansas

Effective Period : April 1

, 2012, through March 31

, 2016

Scheduled Service : Three weekday and weekend nonstop round trips (18 a week) to Kansas City

Aircraft : 9

- seat Pilatus PC

- 12 Rate per Eligible Flight: $ 817 ; 1
Weekly Ceiling : $ 29,412 2

Note: The carrier understands that it may forfeit its compensation for any flights that it does not operate in conformance with the terms and stipulations of the rate order, including the service plans outlined in the Order and any other significant elements of the required service, without prior approval. The carrier understands that an

aircraft take

- off and landing at its scheduled destination constitutes a completed flight; absent an explanation supporting subsidy eligib ility for a flight that has not been completed, such as certain weather cancellations, only completed flights are considered eligible for subsidy. In addition, if the carrier does not schedule or operate its flights in full conformance with the Order for a significant period, it may jeopardize its entire subsidy claim for the period in question. If the carrier contemplates any such changes beyond the scope of the Order during the applicable period of these rates, it must first notify the Office of Aviatio n Analysis in writing and receive written approval from the Department to be ensured of full compensation. Should circumstances warrant, the Department may locate and select a replacement carrier to provide service on these routes. The carrier must compl ete all flights that can be safely operated; flights that overfly points for lack of traffic will not be compensated. In determining whether subsidy payment for a deviating flight should be adjusted or disallowed, the Department will consider the extent t o which the goals of the program are met and the extent of access to the national air transportation system provided to the community.

If the Department unilaterally, either partially or complete ly , terminates or reduces payments for service or changes

se rvice requirements at a specific location provided for under this Order , then, at the end of the period for which the Department does make payments in the stipulated amounts or at the stipulated service levels, the carrier may cease to provide service to t hat specific location without regard to any requirement for notice of such cessation. Those adjustments in the levels of subsidy and/or service that are mutually agreed to in writing by the Department and the carrier do not constitute a total or partial r eduction or cessation of payment.

Funds are not currently available for performance under this Order beyond September 30, 2012

. The Department’s obligation for performance under this Order beyond September 30, 2012 , is subject to the availability of

appr opriated funds from which payment for services can be made. No legal liability on the part of the Government for any payment may arise for performance under this Order beyond September 30, 2012 , until funds are made available to the Department for perform ance. If funds are not made available for perf ormance beyond September
30, 2012 , the Department will provide notice in writing to the carrier.

Subsidy contracts are subject to, and incorporate by reference, relevant statutes and Department regulations, as they may be amended from time to time. However, any such statutes, regulations, or amendments thereto shall not operate to controvert the foregoing paragraph.

All claims for payment must be submitted within 60 days of the last day of service provided under this Order

.

1 Annual compensation of $1,490,479 divided by 1,825 annual departures (36 weekly departures x 52 weeks x 97.5 percent completion).

2 36 arrivals and departures per week multiplied by $817 per flight.